Greece Austerity Bill and Implications for the Government and the Financial Crisis
It was just recently reported by Yahoo News that Greece’s government under the Syriza party has just passed a large austerity bill. According to a report by the Associated Press, “Lawmakers early Saturday voted 154-140 in favor of the bill required for a 2 billion-euro ($2.3 billion) loan installment. It is part of Greece’s third major bailout agreement with eurozone lenders, worth 86 billion euros ($98 billion) over three years.”
It is reported that the bill, after a great deal of debate within the parliament, will go after a number of government programs, including pensions, as well as a rise in when a person can retire in Greece. They new bill also goes after those that do not pay their taxes with more penalty, along with implementing a property tax.
The passing of the bailout was not without controversy. For example, the Prime Minister Alexis Tsipras criticized opposition parities for being critical of the new bill, even though he said that they clearly knew what the austerity road (and related bill) would look like months before, during this summer when Greece agreed to a bailout deal with international actors such as the European Union.
Looking at the situation in Greece, it is not surprising that the socialist government is supporting this austerity package. As I have written before, this is one of the only roads that was actually available to Greece, regardless of what party won the recent elections. Greece is now in debt for over 373 billion euros. Regardless of who won, there is little alternative but to resort to large scale government cuts, along with other measures such as increasing tax revenue. Austerity measures were part of the conditions placed on Greece by the European Union and International Monetary Fund in exchange for bailouts.
Thus, because the debt is so high, Greece has to cut spending even further. Sadly, many wonder whether even this will be enough, given that a large percentage of the money that has been borrowed has went to repaying debt, as compared to money that could be used to help improve economic development and growth in the country. And this is why the government in Greece is also hoping for some sort of debt relief, something that borrowers are currently not willing to offer.
Given the current conditions facing Greece economically, it is difficult to believe that with this new deal, and new cuts, that it will be sufficient for Greece to resolve its economic problems. Plus, given that citizens voted for the socialists, such a bill is sure to leave many in Greece upset, given that they will now be affected, whether it is with regards to reduced pensions, or an increase in the retirement rate. Yet, for now, the Greek government seems to have few alternatives to this path. It is critical to examine and monitor the reaction to these austerity measures from those in civil society. One can expect that Syriza will be blamed by some for pushing a bill that runs counter to what many are hoping for in Greece.
